Yogita, B.A.LL.B., 4th year, MVN University, Palwal. This case law analysis was written by her during a legal internship at LeDroit India.
The case of Daimlerchrysler AG v. Union of India (2004) seems to point out that several various legal solutions against Daimler Chrysler (or its Indian subsidiary)/ Union of India, are mostly hired because of customs duty, income tax or consumer protection related problems. According to the In the search results, the most striking one of them which is dated approximately around 2004 is on customs duty. and probably is DaimlerChrysler India Pvt. Ltd. vs The Union Of India, Joint Secretary To…. on 15 September, 2003 (but stated just at the end of 2003, it was mentioned quite frequently on the background of in the rule of later years discourse). A huge Income Tax Appellate Tribunal is also available. There is the 2004 case and then another case in the Supreme Court that pertains to consumer protection (however, that was not the case). The one is more recent (1978-2024), but talks of what happened around 2002-2003). Since the user has entered the year, 2004, and the relevant case is of custom, then it transforms accordingly to this period.
DaimlerChrysler India Pvt. Ltd. v. Union of India (2003) (Customs Duty Drawback Case)
Facts:
The petitioner; Daimler Chrysler India Pvt. Ltd. brought in a completely fabricated car made in South Africa. December 1995. This import was meant to carry out study and research. have more indgenisation of parts in the Indian car production industry. the automobile was imported on a re-export basis, which implied that it would be exported in the end of the research. research was done. On re-exporting the car the petitioners asserted 98 per cent the drawback of the customs duty paid as provided under Section 74(2) of the Customs Act, nineteen sixty two. through Notification No. 19/1995 dated 6 February 1995. The mannies customs denied the disadvantage, as the argument here goes that the car was already being used in India before the car was exported. exclude them on the 98 percent drawback. This vehicle drove in Pune-Mumbai. point of the research.
Issue:
The main reason here was the question of the use of the imported auto in study and research work Diving it to pune, in India, was a way of using the car, which is counterintuitive to say the least. importation of the same into India, as envisaged in Section 74(2) of the Customs Act. 1962 thus denying a 98 % drawback of customs duty.
Key Arguments:
Daimler Chrysler India Pvt. Ltd. (petitioners):
Presented the argument that the car was being brought as a matter of study and research at a particular end. re-export basis asserted that the use in Section 74(2) is the use as in commercial or use in personal convenience resulting in wearing out, and use in technical study and development. Submitted that the personal use of driving the car at Mumbai to Pune during the time of the course of study was not done. elimination of which amounts to the use in such a manner that would contribute to depreciation or consumption. Reaffirmed how the foreign vendor did not impose any fee on the car. non commercial import nature.
Respondents: (Union of India/Customs Authorities): Continued to hold that driving or operating the car in India irrespective of the purpose is invalid. is use in terms of the provisions. It was argued that an action of driving the car on the Indian roads, investigation notwithstanding, came in the description of the act. the sphere of use since it brought the car into operation. The rest on the rigid construction of the phrase used in India before it was exported to this country. The customs act and the associated notification.
Judgment:
The Court decided in favor of DaimlerChrysler India Pvt. Ltd. and the Court came to the conclusion that the use of the. to study and do research work in an imported car and to drive it in Mumbai to Pune. which in the said case did not amount to use as contemplated in Section 74(2) of the Customs Act. 1962 in order to prevent the 98 per cent drawback. The Court held that intent of the important was the importation and the quality of the use.
Analysis/Observation:
The case has a rather subtle interpretation of the use term in customs law. especially it is with regard to re-export advantages. The Court accepted the difference between spendthrift or individual-use and use of a certain specific, non-commercial such as research and development or in situations where the plan involves re export the product. The move probably tried to initiate the process of technological advancement. promoting indigenization by not punishing the companies in having to engage in technical processes required. associated with re-exporting of imported goods. It underlined the aim and impact of the use, instead of a bare physical exercise of operation.
Conclusion
DaimlerChrysler India Pvt. Ltd. was entitled to drawback of 98 per cent of customs duty. The case established a precedent term use in the context of customs drawback provisions of re- exported goods ought to be viewed regarding the intended use of import and whether the utilization would be creating. depends on depreciation or a commercial exploitation, and not a blanket theory of any physical operation
